How do I annotate excess contributions on my montana medical care savings account?

[heidihmp]

I contributed more than the allowable amount and paid for medical expenses. How do I annotate this on my Montana Medical Care Savings account?

[heidihmp]

I contributed more than the allowable amount and spend the overage on medical expenses. Are these expenses considered that I paid considered nonqualified and subject to penalty?

[BMcCalpin]

The expenses are fine, it's the contributions in excess of the limit that are the problem. When you complete the MSA portion of the interview as outlined below, the excess contribution will be added back to state income and penalized 10%. Don't worry about the expenses.

[BMcCalpin · Accepted solution]

This is not automatic, so you will have to do some arithmetic as you enter it.

In the Montana interview, you will see a screen with the heading: "Montana Medical Care Savings Account". Enter:

• Beginning Balance - whatever your beginning balance was in the account
• MSA contributions - enter your TOTAL contributions (including the excess)
• Account Earnings - whatever the account earned in interest, dividends, and capital gains (if any)
  

Hit Continue. You will see another screen with the same heading.

• MSA Total Withdrawals - enter the total amount of what you spent on medical expenses PLUS your excess MSA contribution
• Withdrawals for eligible expenses - enter only the amount you spent on qualified medical expenses

Hit Continue. You will see a third screen with the same heading.

• NonQualified Withdrawals - enter the amount of the excess contributions
• NonQualified Withdrawal not subject to penalty - enter the amount of the excess that you were (or will be) actually able to withdraw before April 15th.
  

Note that any amount of the excess that you can withdraw will be added to Montana Additions and taxed.

Note that any amount of the excess that you cannot withdraw (presumably because you have already spent the money) will not only be added to your Montana Additions to be taxed, but will be charged an additional 10% penalty.